Replies to post #71899 on China Growth Stocks

[derek2000]

CCME - You can talk to any Chinese bankers, they would probably tell you that the money (CNY$480B, or roughly US$80B) would likely go to

1) State own companies - which could be for fancy projects like high speed rails, bridges, subways, oil pipelines, new mines, etc,

2) Real estate deals if you are not a state owned company - with land or building as collaterals.

Nobody will lend you $100m if you do not have 1) the connection, AND 2) the collaterals, AND 3) a good and low risk project plan. Without those three, you are lucky to get $100K with some bribes, but even bribes will not get you $100m. Do I have to remind you that committing a large security fraud will not be considered a low risk plan since lender's head could be on the chopping board?

"As crazy as the theory may sound, what is happening to this money? Chinese banks ... to loan a massive 480 billion yuan in December."